After the pandemic, a wave of “compensatory shopping” and borrowing to spend appeared worldwide, while Chinese Gen Z chose to save. In China, young people are setting strict monthly savings goals and documenting their efforts on social media. One such young person is “Little Zhai Zhai,” who aims to keep her monthly living expenses at just 300 yuan ($41.20). Meanwhile, young people in China have started buying 1-gram “golden beans” for 400-600 yuan each as a long-term investment.
Young people in China are also cutting back by finding “saving buddies” on social media and forming groups to ensure everyone sticks to their goals. Another way to save is by going to community cafeterias, where meals are sold at low prices. The trend of “reverse spending” and “frugal economy” has also become popular on social media, which means making an effort to cut spending and look for discounts and promotions when shopping.
According to recent reports, total household savings in yuan increased by 11.8% in the first quarter compared to the same period last year, while consumption trends of young people around the world showed a wave of “compensation shopping.” However, a survey by Bank of America in May found that Gen Z took out debt to travel, while Intuit’s Wealth Report showed that instead of saving, 73% of Gen Z in the US preferred a vibrant life over saving and depositing money in the bank.
The International Monetary Fund (IMF) expects China’s second-largest economy to grow 4.5% next year. However, the real estate market has been in crisis for the past three years, with the labor market being a challenge for young people. According to Jia Miao from NYU Shanghai (China), some young people feel they can’t find a job or increase their income, so they have no choice but to spend less. The unemployment rate among young people aged 16-24 in China was 14.2% in May, much higher than the national average of 5%.
While there are no official statistics on monthly salaries for graduates, MyCOS found that in 2023, the average salary for this group will be up by just 1% from the previous year. Rein believes that it may take years before young people regain confidence and can spend freely again after experiencing financial hardship during the pandemic era.
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